Sears/Kmart Movie Streaming Service Apparently Designed For Uninformed Suckers

from the target-marketing dept

The online movie streaming business is an interesting one, which Netflix currently dominates, though it's definitely still early. While Netflix's solution is far from perfect, there's just something about the way in which Netflix set up its online offering -- where people pay for access, rather than content that has been quite appealing to many people. However, with so much interest in online movie streaming, it's not surprising to see others entering the market, though it appears that many are taking a cargo cult approach to creating online movie streaming services: they just put together a service that offers movies for streaming, without taking the time to understand why they work or what people actually want from them.

A few months back, we wrote about Best Buy's online movie service, called CinemaNow, which is just the branding slapped on a service from a company called Sonic Solutions (somewhat confusingly, Sonic had owned and used the CinemaNow brand, but then sold it to Best Buy, who used it to offer a service powered by Sonic). Rather than following the Netflix online model of paying for access, the Best Buy/Sonic solution followed the old Blockbuster model: pay $15 to "buy" (really license for the life of your account, or until the service shuts down) or $4 to "rent," which would allow you to watch the movie within 30 days -- but once you started it, you would need to finish it within 24 hours. Those "24 hour" windows have been tried before, and they serve no purpose other than to absolutely annoy and piss people off.

In talking to people who follow these services, we've heard that CinemaNow has had dreadful pick-up rates. People just really aren't that interested, and it's not hard to see that services like Netflix appear to be a hell of a lot more user-friendly. Best Buy recently tried to amp up its marketing of the service, and the best argument it can make against Netflix is: "We tell people to think of it like using Netflix, except you get to keep what you actually buy." Except, of course, that's not really accurate, nor compelling. First of all, you don't really get to "keep" what you "buy." In fact, you don't really get to "buy" anything. You just license it, and you lose it the second your account closes (or, again, the service goes out of business). And, of course, with the way the Netflix system works, you have unlimited access to every movie in its system anyway, so you basically get to "keep" all of the movies, anyway (if you define "keep" the same way Best Buy is defining it).

So you have a solution that is not compelling, has serious limitations, significantly underperforms the competition and is more expensive than an identical solution from the same core provider. Are Sears & Kmart really saying that their target market is uninformed suckers?

My understanding is that netflicks was smart enough to set up a really good deal with the copyright holders because the copyright holders didn't understand the potential behind netflicks and didn't think they would do much with it and now that they understand how big web streaming video is going to be, they aren't to make the same sort of deal with anyone else and everyone else is basically screwed.

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My understanding is that netflicks was smart enough to set up a really good deal with the copyright holders because the copyright holders didn't understand the potential behind netflicks and didn't think they would do much with it and now that they understand how big web streaming video is going to be, they aren't to make the same sort of deal with anyone else and everyone else is basically screwed.

Except... most of the major studios have blocked Netflix from renting out new releases for 28 days, and the majority of movies availiable for instant streaming are older and/or flops. So Hollywood has not really done Netflix (and their millions of subscribers) any favors either. Basically we're all screwed, unless we download the movies via bittorrent.

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the movies offered on netflix not not just old movies and flops. there are a ton of fantastic newer movies along with complete seasons of network and cable television series. however, the greatest thing about netflix has been the movies and documentaries that i have discovered that i would never have taken a chance on if i had to pay for them up front.

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Netflix has huge value in it's rating and recommendation system. While far from perfect, I've discovered tons of content that way and really enjoyed the results. Props to the variety of content they've added also. I've never failed to find something informative or entertaining to watch, even if the specific title I might seek out isn't available.

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There are tons of fantastic movies on Netflix, like the recent Pixar blockbuster Up, just for instance.

Of course, the real awesomeness is in the television shows and the documentaries. I love queuing up shows for my kids, knowing that they'll be commercial-free. Honestly, Netflix is worth it for that alone.

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So do you have the Sears or K-mart card?

Higher pricing isn't always an indication that they look at the customers as "uninformed suckers", just perhaps that their business model isn't working from the same base numbers as a Netflix might. There is a question of trust, of long term stability that perhaps these people feel towards a name like Sears.

Further, I would say that without the existing user base and the existing product line that Netflix had before entering into the on demand market, I suspect they wouldn't be doing it for the price point they are on. They are on a very low margin, very high volume business model that few other companies can afford to compete with, at least for now.

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No, I don't have either, I just know that their policies suck, their websites suck, their customer service sucks, many of their products suck, and that tells me that people who still shop there are uninformed suckers.

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LOL, no, really, I haven't shopped there in ages because of their crappy customer service, but there's not a week that goes by that I don't read a 'Sears screwed me over.' or a 'Sears won't let me purchase items.' story on the Internet.

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You are confusing your personal opinion with the opinion of the populace at large. If Sears truly sucked as badly as you indicate, they would have gone out of business a long time ago. That they are still in business indicated that they don't suck for some people some of the time.

The people who shop there may be uninformed suckers, or they may be people who value a long term relationship with a reliable source over "this week's new company". It is the same uninformed suckers who pay a couple of dollars more for something from a local store instead of driving out to Sam's Club to save some money.

They aren't suckers, they are people making an informed choice. I hope that your children get to learn the difference between Mom's opinion and fact. :)

It's funny because it's true

My brother-in-law once worked for Sears as a management trainee. Considering that the Sears management team is a bunch of uninformed suckers, this is not at all surprising. (btw, my brother-in-law quit Sears after they swallowed up Kmart and allowed Kmart's defunct (responsible for running a company into the ground) management team to start making decisions.

Re: It's funny because it's true

Do you know what is really appalling. Kmart goes bankrupt, comes out of bankruptcy and is then able to "buy" Sears!!!!! Someone was playing a financial game. To bad there was no smoking gun that I know of. I suspect this would make for a really good story for an investigative reporter. Hint Hint Hint.

Re: You get the customers you deserve

I was forced out of my job as an appliance salesperson at Kmart a few months ago. To add insult to injury, the company contested my unemployment, and got me denied benefits (this, after I was already receiving partial benefits because of their last hours cuts). Any business that mistreats employees and customers as badly as Sears/Kmart does (man, could I tell you stories), has to aim at the suckers. The suckers are all they have left. Oh, and the people who don't or can't read labels (did you know most of the Craftsman line is now made in China?).

Who buys from these services?

I don't get why anyone who wants to own a movie would buy from a service like CinemaNow. It's practically the same price as a Blu-ray or DVD disc, but with far less overall value and no first-sale rights. These services would be fine for PPV -- $3 to $5 has been a pretty steady price for movie rentals over the years -- but for ownership? Really?

Then again, if more customers made educated decisions, a lot of people would be out of business, wouldn't they?

Re: Who buys from these services?

I just recently rented a Elf from Amazon. It was on special for the holidays for $0.99. I viewed it through my TiVo.

It's not obvious to me that Netflix will necessarily prevail in it's model for online streaming. Personally I just think that CinemaNow has the pricing wrong. If anything, RedBox has demonstrated that the value of a movie rental is about a $1. So $4 is too high.

The success of RedBox should give the movie industry something to think about. Streaming is dramatically cheaper to operate. Which means that they could get much better profit margins due to the lower capital costs.

And IMHO, they could effectively use the same model as RedBox. I would almost certainly drop Netflix (which is also available on my TiVo) if I had access to any movie for $1 per rental rather than the limited selection at NetFlix. I don't watch 10 movies per month, so $1 per rental would be cheaper. Also, even if I were to exceed that $10 expense in a given month, the value of much greater selection would be worth it.

So I can see a market for the CinemaNow model. They just have to get the prices right.

Re: Never Underestimate

Apparently it was Henry Mencken, but what a terrible quote! I looked it up and you have it right, but it doesn't make any sense - not if the goal is to call the public stupid anyway. It should be "overestimating" should it not? Or else change "stupidity" to "intelligence"?

As it's currently worded it seems to say that it IS wise to assume the american public is smart and informed.

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in the sense that if you estimate that SOME people are stupid enough to buy your crappy product and make you a profit. Then you find that you underestimated the stupidity of the people and EVERYONE bought your crappy product making you rich, it makes perfect sense.

cimema-not!

Sears

the previous post commenting how people have trust in the name Sears is dead on. They will never have a huge customer base for their movie rentals but have some paying a higher fee allowing them to make a few bucks.